Israel GDP

Israel: Economy improves significantly in Q3

November 16, 2015

In Q3 2015, GDP increased 2.5% over the previous quarter in seasonally adjusted annualized terms (SAAR). The expansion was well above the 0.2% increase tallied in the second quarter and marked the highest reading in three quarters. Q3’s acceleration came on the back of a pickup in both domestic and external demand.

In the third quarter, private consumption expanded 2.4%, which was a significant acceleration over the 1.5% increase seen in the previous quarter. In addition, government consumption swung from a 1.5% contraction in the second quarter to a 1.6% expansion in the third quarter. Moreover, fixed investment expanded 0.7%, which contrasted the 3.1% contraction seen in Q2.

On the external front, exports of goods and services expanded 4.4% (Q2: +9.6% qoq SAAR). Moreover, imports improved from a 7.0% decrease in Q2 to a 0.2% contraction in Q3. As a result, the external sector’s net contribution to overall economic growth swung from minus 0.7 percentage points in Q2 to plus 1.6 percentage points in Q3.

In annual terms, GDP expanded 2.4% in Q3, which was up from the 1.8% expansion reported in second quarter.

The Central Bank expects GDP to grow 2.6% in 2015 and 3.3% in 2016. FocusEconomics Consensus Forecast panelists foresee the economy growing 2.6% in 2015, which is down 0.1 percentage points from last month’s estimate. For 2016, the panel projects that the economy will expand 3.2%, which is unchanged from last month’s estimate.

Author:Dirina Mançellari, Senior Economist

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